German VAT rates and VAT compliance
German VAT rates
While Germany follows EU rules on VAT compliance, it is still free to set its own standard (upper) VAT rate, with the only requirement being that it is above 15%. Suppliers of goods or services who are VAT-registered in Germany must charge the appropriate VAT rate and collect the tax for onward payment to the German tax authorities through VAT filings. For more information, please refer to the German VAT returns briefing.
The current rates are:
|Rate||Type||Which goods or services?|
|19%||Standard||All other taxable goods and services|
|7%||Reduced||Some foodstuffs, water supplies (excluding bottled water), medical equipment for disabled persons, certain domestic passenger transport, intra-community and international passenger transport for certain road, rail, and inland waterway transportation, books (excluding books whose content is harmful to minors), e-books, audiobooks, newspapers and periodicals (except those containing content harmful to minors and/or more than 50% advertising), admission to cultural events, writers and composers, some agricultural inputs, short-term hotel accommodation, certain admission to sports events, social services, medical and dental care, firewood, some timber for industrial use, takeaway food, cut flowers and plants for decorative use and food production, taxation of some gold coins and jewelry.|
|0%||Zero||Intra-community and international transport (excluding road and rail and some inland waterways transport)|
German VAT compliance
Once registered for German VAT, you will have to start following the local rules in a number of aspects. This includes:
- Issuing invoices with the disclosure details outlined in the German VAT Act.
- Electronic invoices with proper signature, authenticity and agreement by the recipient.
- Maintenance of accounts of record, which must be held for at least 10 years.
- Correct invoicing of customers for goods or services in accordance with the German time of supply VAT rules.
- Processing of credit notes and other corrections.
- Use of approved foreign currency rates.
What is the tax point for German VAT?
The tax point, or time of supply rules in Germany determine when the VAT is due. It is then payable to the tax authorities 10 days after the VAT reporting period end (monthly or quarterly).
For most goods, it is the time of delivery or passage of title. For services, it is the completion of the service.
Need help with your German VAT compliance?
Researching German VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
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